Nanocrystalline NiTi shape memory alloys (SMAs) generally possess outstanding biocompatibility, good corrosion resistance, high cyclic stability and superior fatigue resistance. Nanocrystalline NiTi SMAs are frequently made into the components by experiencing plastic deformation at moderate temperatures in order to prevent nanocrystalline grains from growing up at high temperatures. Therefore, it is of great significance to investigate plastic deformation of nanocrystalline NiTi SMAs at moderate temperature by combining crystal plasticity finite element method (CPFEM) with experiment. In the present work, a CPFEM is employed for studying strengthening mechanism of nanocrystalline Ni50·3Ti49.7 SMA during hot deformation at 400 °C, where statistically stored dislocation (SSD) and geometrically necessary dislocation (GND) densities are integrated into the crystal plasticity constitutive model to account for strain gradients based on dislocation slip. The results show that nanocrystalline Ni50·3Ti49.7 SMA exhibits a strong size effect during plastic deformation at 400 °C, where yield stress along with SSD and GND densities increases with the decrease of grain size. It is evident that grain boundary strengthening and dislocation strengthening play an important role in size effect of nanocrystalline Ni50·3Ti49.7 SMA. The occurrence of grain rotation is induced by significant plastic strain gradients and high dislocation densities. With the increase of plastic strain, grain rotation results in the decrease of average grain boundary misorientation and activates additional available slip systems to+ accommodate the deformation, thereby leading to the decrease of the GND density and the increase of SSD density.